Home Depot to increase staff pay by $1 billion

Home Depot's CEO recently revealed their company's commitment to boosting front-line workers' wages and benefits — in a move that is indicative of the tight US labor market and the upward trend in salary expectations. Home Depot has rolled out this across-the-board pay increase in order to retain their hardworking staff for the long haul.

What’s going on:

Home Depot announced a massive $1 billion boost to their front-line hourly workers’ pay and benefits for the year, showcasing the tightening of the US labor market and a growing trend of higher wages.

Though the specifics of the salary hike were not revealed, the CEO of Home Depot shared that in each market, the minimum hourly wage is set at $15 with many paying more. This increase in wages for every front-line worker — regardless of seniority — was implemented to increase the average tenure of their staff.

Why it matters:

The company reported record earnings of $17.1 billion (up 4%), and net sales also up 4% to $157 billion.

In addition to changes in pay and benefits, new management positions on the store’s floors have been created.

How it’ll impact the future:

Despite the company’s guidance for the year ahead, investors were left somewhat unfulfilled as Home Depot said it is expecting little to no change in revenue and a mid-single-digit decrease in earnings per share; a far cry from the narrow increase analysts had projected.

Aside from this, Home Depot is giving staff raises and creating new job positions, which would give the impression of a bolstering economy.